Chile Moves Left

EVENTS in Chile during the past decade and a half have pursued a spectacular course. Until the World War Chile, was generally regarded as politically the most stable nation in South America. Since 1924, however, she has experienced five military coups d'état, three dictatorships and one popular revolution. She came dangerously close to another upheaval last autumn when a coalition of Left wing parties, by a narrow margin, captured the presidency of the Republic, and with it the control of the Government.

In the economic sphere her vicissitudes have been equally dramatic. For a century she enjoyed high credit in the commercial world, due to her consistent endeavor to live up to her foreign obligations. But in 1931-32 she was plunged into a crisis more profound than that of any other South American country, and she was forced to default entirely on the service of the national debt. Her exports dropped to less than one-sixth of their 1929 value and her national revenues to less than one-third.

Since then the Chilean economy has recovered considerably, due in large measure to the opportune policies of the energetic government of President Alessandri, who came into office after the political turmoil of 1932. However, the most important contributing factor has been inflation, injected into the country, for good reasons or bad, by Alessandri's predecessors and utilized by his administration. Inflation has helped the farmers and industrialists, and they have been making money. But the cost of living has also risen greatly, and although accurate figures are difficult to obtain, there is a general impression that wages and salaries have not kept pace. Much building activity has taken place, especially in Santiago, but relatively little has been done to improve the scandalous health and housing conditions of the very poor.

The condition of the laboring, or obrero, class is indeed one of the most important political and economic problems in Chile. Even assuming that wages have kept pace with rising costs, they are still quite inadequate. If the common laborer is accused of being lazy and shiftless, and if an increase of pay results in his merely working less or spending more on drink, the answer is that he is undernourished, illiterate and wretchedly housed, and that he has never been given the opportunity to aspire to anything better. The suffering of the lower and the salaried classes today is reflected in the decreased consumption of milk and bread, in the high death rate and the large infant mortality. This constitutes not only a social problem, but a political danger. And unless the Government makes serious efforts to improve the living conditions of the masses, the seeds of revolutionary unrest will continue to germinate.

The economic depression was not the cause of political instability in Chile: the workmen took no active part in the revolution of July 1931, which overthrew President Carlos Ibáñez, nor did they have a real share in the revolutionary movements of 1932 when the depression was at its worst. Nevertheless, since the turn of the century Chile has been profoundly affected by a general democratization of society -- by the rise of a new middle class and of an organized and radical labor movement. At the same time, the Chilean Congress, representing a long-dominant political and landed oligarchy, displayed increasing legislative irresponsibility. Elections were corrupt, and factional manœuvres took the place of an honest effort to understand and solve the nation's problems, problems which became more pressing after the economic dislocations of the World War.

The national elections of 1920 marked a turning point in the political history of the Republic. For the first time a democratic coalition elected -- by the narrow margin of one electoral vote -- a president, Arturo Alessandri, and gained control of the lower house in the Congress. The new Government announced an ambitious program of social and political reform; yet it failed to achieve the benefits it promised. The new men who took office were without political or administrative experience, and they showed as little sense of public duty as the ones they had supplanted. Congressional incompetence, governmental interference in elections and failure to solve the nation's financial difficulties therefore continued as before.

As a result of this situation a military coup d'état took place in September 1924: an abject Congress was forced to vote fourteen pending measures in almost as many minutes, and Alessandri was packed off to Europe on a leave of absence. A conviction that the new Provisional Government was betraying the reform cause to the old conservative elements led to another coup d'état in the following January. Alessandri was recalled and, in alliance with the reformers, revised the Constitution by strengthening the executive power and abolishing the patently ineffective parliamentary system. Meantime the dominant figure had come to be Colonel Carlos Ibáñez, Minister of War and the leader of all those who were determined to have efficiency and honesty in the Government. Under President Figueroa Larrain, elected in October 1925, a series of cabinet crises carried Ibáñez to the premiership, and upon the resignation of Figueroa he was elected President in May 1927.

Ibáñez, who had now become a general, was for four years virtually the dictator of Chile. Congress obeyed his orders and all opposition in the country was quickly punished by deportation or imprisonment. The fiscal organization was modernized, aristocratic favoritism removed from the higher courts, and an extended program of public works was undertaken and financed by long-term foreign loans. By July 1931, however, the rigor of his government and its continued expenditures beyond the country's limited capacity had produced a civilian revolt. Beginning with a protest strike by university students, it ended in a general strike of the professional classes and of labor. Before it, Ibáñez had no choice but to retire. Such are the political antecedents of the leader of the so-called Nazi Party in Chile today.

Dr. Juan Montero, a public-spirited lawyer and popular university professor, supported by the professional and business classes, was elected President in the following autumn. (The main issue in this election lay between Montero and ex-President Alessandri. The latter, always an opportunist, was then the spokesman for the radical labor elements.) But Montero's administration survived only six months. Inability to cope with the economic crisis cooled popular enthusiasm, and enabled a small group of civilians and army men to overthrow the Government in June 1932 by a bloodless coup d'état. The group that engineered this quick overturn needed two things -- a leader of address and personality, and a program. For the first they picked Colonel Marmaduke Grove; for the second they called in Carlos Dávila, formerly Ambassador in Washington, who some time before had given wide publicity to a "social manifesto." This hastily improvised government could not long survive, and after a series of changes which need not be detailed here, Davila found himself de facto President of the Republic. Dávila preached a moderately socialistic program, but he showed no particular capacity to carry it out. After three months he was forcibly replaced, first by a military and then by a civilian government until new presidential elections were held in October 1932. Colonel Grove, recalled from exile, led the extremist elements, while all the moderate and conservative classes rallied round former President Alessandri. A decade earlier Alessandri had been regarded as a radical demagogue, but he now seemed, in comparison with Grove and his followers, the embodiment of order and stability. He was elected by a large majority.

President Alessandri, then sixty-four years of age, was a remarkable personality, who had always exerted a magnetic influence over the Chilean masses. During the six years of his rule (he left office last December) he administered the country along conservative lines. Under him, Chile was again dominated, as before 1920, by the aristocracy. It had, in other words, a government of the Right. There was a private military organization, called the Milicia Republicana, composed of upper-class youths and replete with rifles, machine guns and drill-halls. This body had been created by a group of citizens to defend the state and to maintain constitutional government. Political arrests and deportations were not infrequent, and the right of public meeting was exercised at the discretion of the police. The real power in the state was Gustavo Ross, Minister of Finance, and the measures adopted to conjure the economic crisis were almost wholly of his making. He became the candidate of the Right in the presidential elections of last October.

The Government coalition behind President Alessandri consisted of Conservatives and doctrinaire Liberals. The Conservative Party is the oldest of the four historic parties in Chile: it represents the landed aristocracy and is distinguished from the Liberals chiefly by its close alliance with the Church. The Liberals, dating from the middle of the nineteenth century, are in most respects almost as conservative. They too represent the older aristocracy; they are not unfriendly to the Church, although historically advocating its complete separation from the state and from political activity; and they have a social program that does not weigh too heavily upon them.

The Radicals, who broke away from the Liberal Party fifty years ago, represent chiefly the middle class; they are distinctly anti-clerical. In the past they were a bourgeois party without any clear principles of social action, a shortcoming which in recent years they have been endeavoring to overcome. They constitute the largest party in the country; but the events of the past fifteen years have split them into several groups and their position is thus an equivocal one. Under Alessandri the party oscillated back and forth, neither formally with the Government nor yet against it.

The Democrats, who form the smallest of the four parties and who do not differ greatly from the Radicals in principle, are drawn chiefly from the workmen and the lower middle class. They first appeared during the serious labor troubles of 1903-4, when their sympathy with labor caused them to split off from the Radical Party. During the Alessandri Administration they were even more divided than the Radicals -- one group supporting the Government, the other (calling itself the Democráticos) opposing it, and each with a separate organization and "directory."

About two years ago there appeared the National Socialists, the so-called Nazi Party, which staged the ill-starred uprising in Santiago last September. This party is purely Chilean in origin and personnel, although it has borrowed some of its ideology from totalitarian Europe; it has comparatively few members, chiefly university students and a few middle-class people. It doubtless has the sympathy of German and Italian residents in Chile, but otherwise it seems to owe nothing to European influences.

Finally, there is a Leftist bloc -- the bloc de izquierda -- which consists of several extremist groups, Socialist and Communist, representing in the main the followings of particular politicians. This bloc originated in the events of 1932 and Marmaduke Grove is its leader. The most important of these groups is the Socialist Party. The Socialists have tried, not without success, to capture the Chilean Labor Confederation of some 500,000 members. There is considerable Communist sentiment among the lower classes, but the Communist Party itself is small, divided into factions, and distrusted by the other Leftist groups. None of these has a mature program, or has been in close touch with similar parties or movements in other parts of the world. A successful Leftist revolution therefore has seemed a remote possibility.

Nevertheless, something like a peaceful revolution recently took place. On October 25, 1938, a Left coalition called the Popular Front won a presidential election against the conservative oligarchy which had previously monopolized political power. The candidate of the Right, Gustavo Ross, was supported by the Conservatives, the Liberals, some Radicals and the moderate faction of the Democrats. The Popular Front candidate, Pedro Aguirre Cerda, had the united backing of a majority in the Radical Party, the Socialists, the Left-wing Democrats and the Communists. A third candidate was former President Ibáñez who became the standard bearer of the so-called Nazi Party. But he was eliminated by his presumed association with the revolt of September 5, 1938, and his followers thereupon pooled their interests with the Leftists in support of Señor Aguirre. In spite of this strange mariage de convenance, which concentrated all the opposition elements behind one candidate, the supporters of Señor Ross, having at least the moral backing of the Government, apparently counted upon easy victory.

The result of this bitterly contested election was the choice of Señor Aguirre by the narrowest of margins. The conservative parties led in the agricultural regions, where the laborers generally vote as instructed by their patrones; but in the big cities and in the nitrate and copper districts of the northern provinces the workers voted heavily for Aguirre. The election, which drew out approximately half a million voters in a population of four and a half millions, was the first in South America between a firmly constituted Popular Front including Socialists and Communists, and a combination of the Right and Center parties. It was the most impressive mass demonstration in South America since the election of President Hipólito Irigoyen in Argentina in 1928.

Señor Ross demanded a recount on the ground that violence by the Leftists at the polls had hampered free voting. An investigating committee was appointed by the Government and feeling rose on both sides, each accusing the other of arming to support the claims of its own candidate. The inquest reduced Señor Aguirre's margin, but confirmed the result; and when the ranking commanders of the army and the constabulary privately pointed out to Señor Ross the great danger of irritating the people by prolonging the recount, he acquiesced in defeat and at the end of November left for Europe. On December 14 the Congress relieved the tension by proclaiming Aguirre president-elect, and he was formally inducted into office ten days later. The most noteworthy official delegate to the ceremony was Indalecio Prieto, War Minister of Loyalist Spain, who flew to Santiago to represent his Government and was received with an enormous popular ovation.

President Aguirre is sixty years of age, a lawyer and wealthy landowner. He has been a leading figure in the Radical Party, a deputy and senator and several times cabinet minister. He is deeply interested in education, and is a writer on agrarian and industrial problems. He is accounted a moderate who can be expected to follow a middle-of-the-road course so far as domestic policies are concerned. In a speech broadcast after the election he declared, "My government will be sincerely democratic, and will definitely end conditions in which the Chilean masses lack food, culture, clothes and dwellings." In a press interview of November 5 he commented upon his program as follows: "Left-wing governments which have been in power during recent years could have accomplished much more, if they had been assured two assets: discretion on the part of the rulers and discipline among the masses. . . . We do not want to put the State into industry. . . . Chile is not ready to nationalize or socialize its great copper and nitrate industries. It lacks the capital for that. We do not intend to use foreign capital as a football. My government will be nationalistic in the sense that it will defend Chilean interests, but its nationalism will be of the head as well as of the heart. . . . We do not intend to 'Mexicanize' Chile. The two countries are very different. We can profit by Mexico's advances, but also by her mistakes. . . . If the large properties show themselves economically inefficient, their lands will be divided -- with compensation to existing owners, according to the law which has been on our books for some time -- and given to those who want plots and can work them. We desire to increase the number of small farmers and thus provide a social basis for political democracy."

The senior partner in the Popular Front is the Radical Party, and for the moment it seems to control the political situation. The new Cabinet, announced on December 14, included six Radicals, two Democrats and three Socialists. The Communists were not represented, nor were the followers of General Ibáñez.[i] Somewhat disconcerting has been the clean sweep made in all branches of the administration. Not only have the political authorities in all provinces and departments been replaced, but the managerial staffs of the Central Bank, National Mortgage Bank, National Export Board, Exchange Control Commission and Workers Insurance Bureau, have been completely reorganized, as have also the high commands of the army, navy and rural constabulary. There has been a wholesale removal of diplomatic and consular officers, and a radical readjustment of personnel in the Foreign Office. President Aguirre apparently believes that the landowning and capitalist class formerly in power will not coöperate in the Government's program, and he therefore is installing in office an entirely new lot of men friendly to the social and economic reforms which he has promised the country. In this circumstance, however, there lies a danger. The new personnel is in most cases without experience, and in the government banks and other fiscal agencies as well as in the foreign service, the complete elimination of the old order may involve a liability as well as an asset for the new régime. It may remove the needed brakes upon over-hasty reform and it may lead a well-intentioned but radical Government to defeat its own purposes with ill-considered measures.

Long-term plans have already been announced for the electrification of the entire country by the installation of hydroelectric plants and the distribution of cheap current to national industries. Also promulgated is a program of colonization designed to settle small farmers on unused land, an extensive system of new highways, rapid provision of low-cost workmen's homes, and a reorganization of the entire school system in the interest of popular education. The Government proposes to spend ten million pesos a year on the care of tubercular patients, and eight millions annually on clothing for poor school children.[ii] This vast program is reported to involve an expenditure of 500 million pesos ($20,000,000) annually. Whence the money is to come has not yet been made clear, if indeed the problem has even been squarely faced. In a general way the Chilean "New Deal" is designed to increase agricultural and industrial production, reduce the cost of living, lessen the necessity for imports and strengthen the exchange value of the peso. It is also announced that the Government will consolidate all social security organizations into one unit and divert a large portion of its investments to public projects. None of these measures, however, can finance the Popular Front's ambitious program of social reform. This can be effected only by some kind of public financing. But the nation is poor, and foreign loans are not likely to be secured easily. Since the middle class is small, any great improvement in the standard of living of the masses must be at the expense of the wealthy.

For years Chileans have pinned their faith in the future of their country upon industrialization. Chile possesses important resources of iron, copper, coal and water power. Since the economic crisis of 1931-32 the growth of manufactures has been considerable, and the new régime is evidently pledged to intensify this trend. But Chile suffers from a dearth of native capital, and the heavy taxation of recent years is not conducive to its accumulation. In the past, like other Latin American countries, Chile has needed the coöperation of the foreigner. At present Chilean opinion is not very friendly to foreign capital, and some believe that what is already invested there has been too severely treated to attract much more to the country. Moreover, Chile's home market is relatively small, the purchasing power of the masses is low, and foreign markets for manufactured goods are confined to Peru and Bolivia, Chile's non-industrial neighbors. But these will probably find it more to their interest to import from the United States and Europe, where their own export markets lie. Thus, there is no basis for cheap, large-scale manufacturing in Chile. Chile has a superb climate and a vigorous people, intelligent and enterprising. She possesses sufficient agricultural resources to feed herself comfortably, and large potential mineral wealth. But unless income can be greatly increased, unless she discovers some new source of exportable goods which can play a rôle in the national economy comparable to that of nitrate of soda before the World War, she may experience a decline, rather than an increase, in the general standard of living.

Moreover, it cannot be forgotten that President Aguirre was put into office partly by elements determined to effect revolutionary changes in the Republic. Their radicalism is probably in large measure due to their poverty. Should the Government be unable to make good its promises, should the social regeneration of the Chilean workers move at too slow a tempo, a renewal of disorders may be anticipated. It is also possible that the Rightists will not be inclined to submit tamely to the confiscation of their wealth. Rumors of conspiracy are already abroad. And there remains the figure of General Ibáñez who, absolved from complicity in the September uprising, returned to Chile at the end of December. He has refused to take any post under Aguirre, preferring to devote all of his time to organizing his party. Experience has shown that two regiments are enough at any time to seize the Moneda, or Government House, if a few designing officers can win them over. And the rest of the garrison is loath to oppose them with rifles, being unconvinced that any administration is worth protecting to the extent of firing on their own comrades. Ibáñez may possibly be biding his time, and should events warrant, he might again come forward as the strong man of Chile.

The tragic disaster of the earthquake on last January 24 -- exactly one month after Aguirre's inauguration -- has suddenly confronted his Government with new and unforeseen problems. It practically destroyed the principal towns in six provinces, including Concepción, Chile's third city. The President has asked Congress to approve the raising of a 2½ billion peso fund for relief and reconstruction, a sum half again as large as the normal annual budget. Most of this will have to come, directly or indirectly, from heavy taxes on farm lands, industries, commerce, inheritances and other items. The effect may be to make the financing of the social program well-nigh impossible. It may, at the same time, by its demands upon capital reserves, hasten that levelling of classes which the Leftist ideology envisages.

[i] It is interesting to note, however, that the new President's first decree declared an amnesty and complete freedom from responsibility for all those involved in the "Nazi revolt" of September 5. On the other hand, according to press reports, a "Nazi" Congress in January completely reorganized the party, firmly repudiated Hitlerism, and moved closer to the Socialists. It has changed its name to Popular Socialist Vanguard, and demands the nationalization of large capitalistic enterprises, including the foreign-owned copper, nitrate and electric power industries.

[ii] Among the reforms immediately put into effect were an eight-hour working day for public employees, a 50 percent reduction of railway rates on wheat and flour, the government fixing of the price of important foodstuffs, return to the owners without charge of all property in pawnshops belonging to the working classes, and nullification of decrees by the Alessandri Government granting land concessions in Magallanes Province.